Alpha Baking Co. has seen some considerable technological changes through the years in terms of managing distribution logistics.
“Everything today is different,” says Robert J. McGuire, vice president, director of logistics.
“Everything we do today is subject to change tomorrow, because the business in logistics in this country is extremely dynamic right now. Regulatory control, fuel/alternative energy, equipment changes, technology, the highway infrastructure and driver shortages are changing rapidly.”
McGuire says that a key challenge today is compared to five or 10 years ago is the driver situation, noting that the trucking industry experienced a 93 percent turnover in 2014. “The most-looming issue today is the driver shortage,” he says. “As a result, I think you have to revisit the way you ship products.” This plays into regional distribution, and at a higher level when going national. “Today, we’re using the rails, employing intermodal shipments into our distribution program.”
Today’s modern fleets come with multiple upgrades related to sustainability. “The equipment that we’re purchasing today has several emissions upgrades versus the trucks being replaced,” says McGuire. But they often come with a hefty price tag. “Day cab Class 8 tractors cost approximately 60 percent more today than those being replaced,” he says. “Today, you have to explore every cost-favorable option possible to offset these costs, including fuel applications with alternative energy, truck specs and financing.
“One key change today is the usage of alternative energy to fuel our vehicles,” continues McGuire. “I feel we have been pioneers in the pursuit of alternative energy applications.” The bakery experimented with use of waste vegetable oil to power both step vans and Class 8 day cab tractors over a decade ago. “We no longer employ that tactic,” he says. “However, the learnings from that initiative facilitated long-term sustainable applications. Today, we run trucks on a fleet of propane-powered step vans, and will be adding a number of all electric step vans to our fleet later this year.”
Alpha Baking Co. manages a fleet of over 300 power units and close to 600 pieces of equipment. “We serve 13 states with fresh product, eight of them with our own fleet, and another five with third-party carriers. We distribute frozen throughout the entire country employing frozen refrigerated carriers.”
Working in both retail and foodservice markets helps diversify revenue streams, and sometimes factors into logistics decisions. “We streamline logistics by combining both retail and foodservice distribution networks in the less densely populated markets to reduce windshield time,” says Mark Marcucci, vice president of sales. “In the more populated areas, we keep the networks separate so that the route sales people can better concentrate on one area of business.”
Owning its own fleet helps Alpha Baking Co. maintain better control of some aspects of distribution. “On the foodservice side of our distribution network, we own and operate our own fleet, which we feel gives us better control to better serve our customers, both large and small,” says Mark. “On the retail side, many of the routes are distributor-owned, which allows the distributors to carry a wider variety of products, making each drop size larger so the route sales person can afford to spend more time at each retailer.”
Alpha Baking Co. factors multiple storage dynamics into its distribution plan. “Each plant has limited fresh warehouse space available, but we do have multiple freezer locations to service our frozen division,” says Mark. In order to make this work, the bakery developed a hub-and-spoke distribution system. “We use one of the producing plants as the main hub where a majority of the products are gathered and then broken down into different loads and shipped out in trailer-load quantities to our depots or freezers, depending on the end use. At the depots, the product is further broken down to the route level. This allows our route sales people to spend more time in their markets servicing our customers.”
For an in-depth look into Alpha Baking Co. and its growth through the years, see “Alpha Baking Co. - Growth through diversity.”